You've
just been told your group plan is going away..... and your employer
isn't offering COBRA.

Why
won't there by any COBRA?

COBRA
is a part of the group plan; if the group plan ceases to exist, so does
the COBRA. This would apply to someone already on COBRA as well as
someone
who would normally be eligible for it right now. Anyone currently on
COBRA
will lose their COBRA when the group plan goes away.

Do
I have any other options?

Plenty
– as of January 1 2014, healthcre reform has made it impossible to be
declined due to pre-existing health conditions. In the past, there were
not always a lot of options - but there were a lot of less-expensive
health policies to buy if you were in relatively good health.

If
you had a pre-existing condition which would render you uninsurable by
a regular carrier, you could apply for guaranteed coverage under a law
called
HIPAA (Health Insurance Portability and Accountability Act, 1996). This
type of coverage was offered by most carriers who offered individual
plans
and was three to five times higher than regular rates would be,
since
this plan forced the insurance company to take someone they would
normally
decline, and to cover all conditions. The Affordable Care Act made it
mandatory that all carriers now cover all conditions - and resulted in
most carriers having to raise premiums 50-100% to accomodate that
requirement. It wasn't a surprise to anyone: the Congressional Budget
Office announced in 2010 that this would have to happen and it did. The
media downplayed this announcement, of course - consumers seeing the
new rates for the first time were in for a major financial shock.

Some
pre-existing conditions were coverable by most insurance carriers:
hypertension
(controlled for at least six months with the same medication), high
cholesterol, situational or mild depression, etc. Regular
carriers, such as Aetna, Humana, HealthNet,
Cigna, BCBS,
United Security Life, John Alden, Golden
Rule (UHC)
would generally accept (and often cover) those conditions with either
an exclusion clause or increased premium. HMOs are health maintenance
organizations
and rarely allowed for any pre-existing conditions, for the most part,
especially
if there were medications involved. All that changed in 2014.

Many
conditions would actually render someone ineligible for coverage; there
were
simply
some conditions that a carrier would not put an exclusion clause (or
"rider")
on, such as Type I diabetes, obesity, cancer in the last five years
(other
than basal cell), pregnancy, stroke, heart attack, angioplasty,
by-pass,
stint, elevated liver enzymes, hepatitis C, ulcerative colitis,
fibromyalgia,
CP, CF, MS, MD, severe asthma, emphysema, COPD, congestive heart
failure, rheumatoid
arthritis,
sleep apnea, a 'condition of unknown origin'... many conditions.
There were a few exceptions... but only
a few.

If
you had pre-existing conditions that could get you declined, you could
often
get a short term plan, which covered you for anything new in
the
way of illness or injury. There is no coverage for routine check-ups,
physicals,
maternity or mental health. If you were pregnant, you could not get a
short
term or any other health plan plan, as a rule – if you are applying for
portability (HIPAA), yes; if you could qualify for AHCCCS
(low-income),
yes;
if you were going to another group plan which has enough members on it
for
maternity to be a required option of the coverage, yes. A
medical
discount program (not to be confused with a medical savings account),
yes. But things have changed and while short term, AHCCCS, and
group coverage are still available, anyone can get coverage under the
Affordable Care Act (ACA) - so long as they apply during the specific
enrollment period.

The
first thing to do if you have lost group insurance (because the group
plan itself is going away, meaning you were not offered COBRA) is to
check out the
benefits on your spouses' group plan, if applicable. If that is not an
option, and if you are in reasonable health, you can apply for coverage
with any number of carriers, but it would be advisable to get a short
term
plan to fill in the gap between the group plan and the time it takes
for
a new plan to go into effect.

In July of 2010, Arizona
acquired a federal "high risk pool" called PCIP - Preexisting Condition
Insruance Plan - which stopped taking application in February 2013 for
lack of funding. Then the ACA went into effect on 1/1/14. This was not
voted in by the
tax-payers but
was mandated by the federal government. The monthly premiums tend
to be high compared to premiums pre-ACA, but in some situations can be
offset by a tax
subisdy, or tax credit, if one's taxable income falls between 133% and
400% of the poverty level. There is no other qualification to
obtain a subsidy, or tax credit, other than income, must not be
Medicare or Medicaid eligible and must be a legal resident. If you
earn over 400% of the poverty leel, you cannot get a
tax subsidy; you pay full price.

Group
insurance, on a per person basis, is generally more expensive than
individual,
since the risk is greater to the carrier providing that coverage.
When an employer with 20-25 employees hires someone who has been
recently
treated for heart attack, stroke or cancer, who is insulin dependent,
has
hepatitis C or any one of over 50 other conditions, the premiums for
the entire group can
increase
anywhere from 10% to 40% when the plan comes up for renewal (and these
renewal
increases are passed on to those on COBRA, since COBRA is part of the
group
plan - therefor, the rates for the person on COBRA will go up
proportionately,
also). The greater the risks in the group, the greater the premium to
the
group. Some group rates have escalated to the point where employers
have
dropped their plans entirely. Group insurance often seems inexpensive
to
the employee, because most employers pick up 40%-75% of the premium, if
not more. When someone goes on COBRA and sees the
premium,
they don't realize that this is a dollar for dollar match to what the
employer
was being charged for that employee's insurance.

Under
the "health reform bill" (ACA) signed in March 2010, an employer
had to cover 65% of the first nine months of COBRA coverage for an
employee
who
was involuntarily terminated. That benefit went away years ago. Also,
if you are on COBRA and
the group plan it comes from, goes away, the COBRA does, too.

If you have any questions, or
we can be of any assistance, feel free to call our
office at 623-435-5511 (in Maricopa county) or 888-543-5637 (outside
Maricopa county).